Sunday, November 22, 2009

After a quick announcement below, we have a variety of topics to share: financial reform, employment, health care, and climate change. Things are moving on all fronts, so it is a busy time in our nation's capital.

Announcement - With the Thanksgiving holiday on Thursday, Rollins Financial and Rollins & Associates will be closed for both Thursday and Friday. The office will reopen on Monday, November 30 at 8:30.

Financial Reform

Another Round of Regulatory Reform - The New York Times - "Throughout the fall, lawmakers in the House have been drafting and reworking legislation to reform the financial system. Senate Democrats weighed in last week with a plan that is stronger than the House bills on aspects of derivatives regulation and consumer protection. It also invites healthy debate on other issues, like the role of the Federal Reserve in a reformed system."

Frank, Dodd Will Fix Banking Regulation But Good - By Caroline Baum - Bloomberg - " Members of Congress are plumping their feathers, holding press conferences and congratulating themselves for a job well done. Not that they need an excuse. This time, though, they’re celebrating the completion of a draft bill to overhaul the financial regulatory system."

Don't Let Banks Hide Bad Assets - By Roderick M. Hills, Harvey L. Pitt, and David S. Ruder - The Wall Street Journal - "Independent accounting standards have helped make American capital markets the best in the world. In making financial decisions, investors rely heavily upon the integrity of corporate financial reports prepared in accordance with accounting standards established by the independent Financial Accounting Standards Board (FASB). That board is supervised by the Securities and Exchange Commission (SEC). Now, the Obama administration is on the verge of transferring accounting standards responsibility from the SEC to a systemic risk regulator. Such a radical move would have extremely negative consequences for our capital markets."

Employment

On the White House Jobs Forum - By Jackie Calmes - The New York Times - "The White House forum will take place as Congressional Democrats have begun casting a wide net for ideas to include in a jobs bill. The flurry of activity reflects a sense of urgency now that the unemployment rate has breached 10 percent. With wary employers reluctant to expand their workforces despite the recession’s apparent end, economists say the jobless rate is likely to remain high through next year — when lawmakers’ own jobs are on the line in next November’s election."

The Phantom Jobs Stimulus - The Wall Street Journal - "Jonathan Karl of ABC News deserves credit among Beltway reporters for committing journalism and actually fact-checking White House claims. Head Start in Augusta, Georgia claimed 317 jobs were created by a $790,000 grant. In reality, as Mr. Karl reported this week, the money went toward a one-off pay hike for 317 employees."

Has Europe Got the Answer? - The Economist - "At first sight, the idea that Europe has anything to teach America about tackling unemployment seems preposterous. America has some of the most flexible labour markets in the developed world, while continental Europe, in the popular imagination, is a sclerotic place with powerful unions, rigid labour markets and high entrenched joblessness. Over the past quarter-century America’s unemployment rate has averaged 5.8%, compared with 9.5% in France and 9.1% in Germany. This picture may be changing."

Health Care

A Ban on Genetic Discrimination - The New York Times - "The Genetic Information Nondiscrimination Act ushers in a new era. The law prohibits employers from asking for genetic tests or taking into account an employee’s genetic background in hiring, firing or promotions. It prohibits discrimination on the basis of genetic background in group and individual health insurance plans."

The End of HSAs - The Wall Street Journal - "Start with its attack on flexible spending accounts that are an important part of many employer plans. Flex accounts let employees set aside some portion of their pre-tax pay for out-of-pocket costs or medical services that their insurance plan doesn't cover, such as a child's orthodontics or testing supplies for diabetics. The Reid bill caps these now-unlimited accounts at $2,500 per year and imposes new restrictions on qualifying medical expenses, raising some $5 billion by exposing income above the non-indexed cap to taxes."

The Health-Care Buffet - By Allysia Finley - The Wall Street Journal - "According to the Centers for Disease Control, obesity was responsible for $147 billion of medical costs in 2008. Mr. Thorpe calculates that obesity accounted for 27% of the rise in health-care costs between 1987 and 2001. But here's the real whopper: If current obesity trends continue, obesity-related health-care costs will total $343 billion in 2018. Who knew that fat could weigh so heavily on our health-care system?"

The Senate’s Duty on Climate - The New York Times - "Our own candidate for criticism is the United States Senate. We cannot rewrite the Bush years any more than we can persuade the Chinese of the merits of a binding treaty to control greenhouse gases. What the United States can do is assume responsibility for its own emissions, and this the Senate has manifestly failed to do."

Duke’s Rogers: Why Nuclear Power Will Probably Trump Coal - By Keith Johnson - The Wall Street Journal - "Duke Energy boss Jim Rogers is a big voice on energy and climate change for a couple of simple reasons. He runs a big utility, heavily invested in coal power, and he’s an outspoken proponent of climate-change legislation that spooks many of his peers. So his take on America’s energy future is usually interesting. No exception in this recent interview with the Council on Foreign Relations, where he makes the case for why nuclear power will likely beat coal in a country still heavily reliant on the black stuff."

What Drives China? Soon, Cleaner Fuel - By Chen Aizhu - Reuters - Lorry driver Zhang Jianwei isn't worried about cleaner fuel requirements that come into force in China next year, raising the price of motor fuels -- he will just keep buying cheaper, dirtier diesel at smaller stations. Zhang's example underscores the cautious approach the world's second largest oil consumer is taking to introducing tougher diesel and gasoline specifications, and shows why there will be little initial impact on China's fuel trade."

About Us

Rollins Financial, Inc. is an SEC registered investment advisory firm that was established in Atlanta, Georgia in 1990 by Joseph ("Joe") R. Rollins. Joe along with partners Robert ("Robby") E. Schultz, III and Edward ("Eddie") J. Wilcox offer independent investment management services for individuals, small businesses and
corporations.

Rollins Financial employs various investment strategies depending on the specific objectives of each client. Our independence insures that we are able to provide the most objective investment advice since we receive no compensation from any third parties.

Important Disclosures

The information provided on the Rollins Financial Blog is for general informational purposes only and is not intended to be a substitute for specific individualized tax, legal or investment planning advice. The type of securities and investment strategies mentioned may not be suitable for everyone. Each investor should review a security transaction and investment strategy for his or her own particular situation. Data contained herein is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed. Where specific advice is necessary or appropriate, consult a qualified tax advisor, CPA, financial planner or investment manager.